Bank Sues Rubashkin Family Over Defaulted Loan

$300,00 loan was taken out for Nevel Properties and personally guaranteed by Aaron, Heshy and Sholom Rubashkin.

Bank suing Rubashkins for unpaid loan
By Trish Mehaffey • The Gazette

Related Story: Agriprocessors charges to be tried separately, judge rules

CEDAR RAPIDS — Former Agriprocessors Vice-President Sholom Rubashkin, his father and brother are being sued by Omni National Bank for a $300,000 unpaid loan they made in 2007. 

The lawsuit, filed Thursday in U.S. District Court, claims Sholom, Tzvi and Aaron Rubashkin made the loan in 2007 on behalf of Nevel Properties and it was to be paid off in monthly installments. Sholom, Tzvi and Aaron Rubashkin each pledged their assets as security for the debt of Nevel Properties, according to the lawsuit.

According to the loan agreement, upon default, Omni can declare the principal sum with the accrued interest is due and payable at once, according to the suit. Omni exercised this option on Nov. 26, 2008 and claimed $332,173 was due. 

The debt wasn’t pay and the Omni is asking for the Rubashkins to pay $332,173 with interest from and after Nov. 10, 2008.

Agriprocessors filed for bankruptcy in November, almost six months after federal immigration agents raided the Postville meatpacking plant and arrested 389 workers. A bankruptcy trustee this week proposed a deal to sell the company for $8.5 million. 

SHF, a new company formed by Montreal businessman Heshey Friedman and two associates, has agreed to pay the $8.5 million to two of Agriprocessors’ largest secured creditors — First Bank Business Capital of St. Louis and the credit arm of Metropolitan Life Insurance. 

The sale price is so much less than the company owes its creditors that the more than 400 unsecured creditors may land up empty-handed. Creditors with a security interest in plant equipment will have to negotiate the best deal they can with buyer SHF Industries Inc.